IP Law Alert : Intellectual Property Lawyers & Attorneys : Gibbons Law Firm : Copyrights, Patent Infringement, Unfair Competition

Why all the buzz about biosimilars?

Biosimilars, also known as follow-on biologics, are biologic medical products whose active drug substance is made by a living organism or derived from a living organism by means of recombinant DNA or controlled gene expression methods. The evolving biosimilars landscape is of concern to companies here in the U.S. and worldwide.

Next week, the Gibbons Institute of Law, Science & Technology will be hosting “Navigating the Biosimilars Landscape,” on February 19, 2013, from 4:30 - 7:00 pm at the Seton Hall Law School in Newark, NJ. This program will provide a look at biosimilar legislation and legal aspects relating to biosimilars, as well as considerations and strategies for both innovator and biosimilar companies.

Panelists for this program include Reza Green, Vice President of Intellectual Property for Novo Nordisk, Inc.; Jordan Paradise, Associate Professor of Law at Seton Hall University School of Law; and Estelle J. Tsevdos, Ph.D.; George M. Gould and Lisa H. Wang of the Gibbons Intellectual Property Department. The panel will discuss litigation under the Biologics Price Competition and Innovation Act (BPCI), state-based legislation affecting biosimilars and the Food and Drug Administration’s regulation of biosimilars.

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In Norman IP Holdings, LLC v. Lexmark Int’l, Inc., a recent Eastern District of Texas decision, Chief District Judge Leonard Davis provided guidance on the application of Fed. R. Civ. P. 20 (“Rule 20”) joinder and Fed. R. Civ. P. 42 (“Rule 42”) consolidation in patent infringement cases post-enactment of the Leahy-Smith America Invents Act (“AIA”). Norman IP brought suit against Lexmark and others on September 15, 2011, one day before the AIA was signed into law. Norman IP later added an additional 23 defendants. The defendants filed a motion to dismiss for improper joinder or to sever, and Norman IP alternatively requested that any severed cases be consolidated under Rule 42. The Court granted defendants’ motion to sever and issued an order consolidating the cases for pretrial issues excluding venue.

In the decision, Judge Davis assessed the defendants’ motion to sever under Rule 20 and under 35 U.S.C. § 299, the codification of the AIA joinder rule. Under Rule 20, defendants may be joined in an action if plaintiff’s asserted right to relief against each of the defendants “aris[es] out of the same transaction, occurrence, or series of transactions or occurrences.” 35 U.S.C. § 299 limits the scope of Rule 20 requiring that “accused infringers . . . not be joined in one action as defendants . . . based solely on allegations that they each have infringed the patent or patents in suit.”

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According to a press release from the Governor’s office, a recent review issued by Business Facilities magazine reported that New Jersey jumped eight positions to rank second for biotechnology strength among U.S. states.

Some of the factors cited as responsible for this improvement include increases in R&D tax credits (from 50% to 100%) and the adoption of a new single sales factor formula for corporate tax liability, which will reduce company costs.

This development follows the 2011 Jones Lang LaSalle report that identified the biotech region of New Jersey/New York as the Number 2 region behind Boston. The report further forecasts a bright future for the life science industry for this region.

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Gibbons is proud to once again sponsor lunch at the Rutgers Business School’s Blanche and Irwin Lerner Center for Pharmaceutical Management Studies Program on Thursday, April 26, and Friday, April 27, at Rutgers Business School - Newark, One Washington Park, Room 1027, 10th Floor.

Prior to the lunch on April 26, Charlie Gaglia and Sheila McShane of the Gibbons Intellectual Property Department will present, “Patents and Intellectual Property Rights" from 10:50 am - 12:05 pm.

The two-day program will address timely topics in the pharmaceutical industry, including the regulatory environment; intellectual property issues; marketing, biotech emergence; financial performance metrics; managed care and drug development.

The full agenda for this insightful two-day program can be viewed here.

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On Monday, the United States Supreme Court granted certiorari in the well-publicized Assn. For Molecular Pathology v. Myriad Genetics, et al. case (“Myriad”) for the purpose of vacating the underlying Federal Circuit decision -- finding isolated DNA sequences from human genes as patentable subject matter -- and remanding the case for reconsideration in view of its recent ruling in Mayo Collaborative Services, et al. v. Prometheus Laboratories, Inc. (“Mayo”).

We have previously written on both Myriad and Mayo. In Myriad, the Federal Circuit held that DNA sequences in their isolated state “are not the same molecules as DNA as it exists in the body; human intervention in cleaving or synthesizing a portion of native chromosomal DNA imparts on that isolated DNA a distractive chemical identity from that possessed by native DNA,” and upheld the validity of a patent claiming isolated DNA sequences. But last week, in a much anticipated case, the Supreme Court determined in Mayo that appending conventional steps to the laws of nature, natural phenomena and abstract ideas does not make such laws, phenomena and ideas patentable. Indeed, the Court expressed concerns that “patent law not inhibit further discovery by improperly tying up the future use of laws of nature.” Mayo, slip op. at 16.

Whether the Federal Circuit can reconcile its position in Myriad with the recent Mayo decision -- and the Court’s concerns stated therein -- remains to be seen. In the meantime, pundits and practitioners will continue to speculate on and grasp the influence of Mayo on Myriad, and beyond. As always, Gibbons P.C. will track the progress of these developments and provide updates accordingly.

Todd M. Nosher is an Associate in the Gibbons Intellectual Property Department. Charles H. Chevalier, an Associate in the Gibbons Intellectual Property Department, co-authored this post.

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Gibbons P.C. will once again sponsor lunch at the upcoming Rutgers University/Blanche and Irwin Lerner Center for Pharmaceutical Management Studies Program on Thursday, October 27, from 12:00 - 1:00 pm at Rutgers Business School - Newark.

Prior to the luncheon, from 10:30 am - 12:00 pm, Gibbons attorneys Charles A. Gaglia, Jr. and Sheila F. McShane will present, "Patents and Intellectual Property Rights," a discussion of recent legal developments and trends affecting the pharmaceutical industry.

The full agenda for this two-day program may be viewed here.

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The Federal Circuit’s Myriad Genetics decision, Ass’n for Molecular Pathology v. U.S. Patent and Trademark Office, 99 U.S.P.Q. 2d 1938 (Fed. Cir. 2011), which invalidated most of the method claims in the patents at issue, brings to mind a concern about the value of method claims, particularly to the pharmaceutical industry.

The Myriad Genetics patents at issue included two types of method claims relating to human genetics: one involved determining whether a female patient had abnormal BRCA1/2 genes by comparison of BRCA1/2 gene and BRCA 1/2 RNA from the patient’s tumor sample to those from a non-tumor sample; the second was an activity screening method for anticancer drugs that compared the growth of a host cell transformed with a cancer-causing BRCA gene in the presence and absence, respectively, of the test compound.

The practice of these method claims abroad would not necessarily raise an infringement issue in the U.S. because neither type entails the importation into the U.S. of a product that would potentially infringe the Myriad Genetics composition claims or method claims. Rather, only data from the results of the method claims need be imported. The methods could be practiced in the absence of a claim to the BRCA genes themselves since the technology for isolating the genes, their sequences and the means of transforming host cells therewith are within the skill of the art.

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The Federal Circuit recently found that intervening rights can apply to a claim that has been narrowed by argument only during a reexamination.

In Marine Polymer Technologies, Inc. v. HemCon, the Federal Circuit recently found that narrowing a claim by argument only changes the substantive scope of the claim for purposes of intervening rights. Specifically, a claim term that is changed during reexamination without changing a word in the claim can still substantively narrow the scope of a claim. Therefore, upon reissue of the patent, an infringer would have “… absolute intervening rights with respect to products manufactured before the date of reissue.”

Marine Polymer alleged infringement of certain claims of its U.S. Patent No. 6,864,245 (the “’245 Patent”). During the district court Markman proceedings, the definition of only one claim term, biocompatible p-GlcNAc, was in dispute. The term “biocompatible” appears in every claim of the ’245 Patent. Both plaintiff and defendant proposed term constructions. The District Court reject their proposals and adopted its own, concluding that biocompatible p-GlcNAc meant “polymers… with low variability, high purity, and no detectable biological reactivity as determined by biocompatibility tests.” Based on this claim construction, the district court granted summary judgment of literal infringement for all of the seven asserted claims.

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On Tuesday, September 6, 2011, the Senate invoked cloture on H.R. 1249, also known as the America Invents Act, making it almost a done deal for passage of this Act. One reason that this bill has succeeded over its predecessors is that, with one major exception, there is little difference between the House and Senate versions. The passage of H.R. 1249 will mark the culmination of a 6-year process to pass patent reform legislation that started with H.R. 2795.

The USPTO has provided a summary of the key provisions of H.R. 1249. One provision omitted from this bill but present in failed predecessors is the issue of damages. This generated significant opposition in the past. While H.R. 1249 is not without detractors, it reflects the compromise reached among individual inventors, universities, large and small business concerns. The most controversial provisions in the bill are the following:

• First Inventor to File. Transitions from a “first-to-invent” to a “first-inventor-to-file” patent system while maintaining a 1-year grace period for disclosures by the inventor.

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Several bills are currently pending in Congress establishing expedited marketing approval pathways for biosimilar drugs. The proposed pathways are analogous to the pathway for small molecule chemical drugs established by the passage of the Drug Price Competition and Patent Term Restoration Act of 1984, commonly referred to as the Hatch-Waxman Act. The Hatch-Waxman Act includes a data exclusivity provision whereby the FDA is prohibited from approving a competitor’s drug application relying on the innovator’s data for a statutory period of time. Recent debates concerning the biosimilar bills have focused on the data exclusivity period. These debates highlight the differences between biological drugs and small molecule chemical drugs and why a longer exclusivity period may be necessary to fill the “patent protection gap.”

Debate on Data Exclusivity Period

Under the Hatch-Waxman Act, a five-year exclusivity period is permitted for a new chemical entity. A three-year exclusivity period is permitted for new clinical investigations of small molecule drugs and other exclusivity periods are granted as incentives to develop drugs for children or small patient populations. With regard to biosimilars, proposals on data exclusivity terms have ranged from no exclusivity period to over 12 years. House bill H.R. 1427 sponsored by Representative Henry Waxman provides for five years of exclusivity while H.R. 1548 sponsored by Representative Anna Eshoo provides for an exclusivity period of up to 14.5 years. An FTC report questions whether any data exclusivity period is necessary, suggesting that existing patent protection and market-based pricing would offer sufficient incentive for biological drug development. The Biotechnology Industry Organization (BIO) counters that the FTC’s report failed to account for the advantage given to follow-on companies who rely on the innovator’s development and research work. In addition, BIO also notes that reliance on patent protection for biological drugs may be inadequate since the biosimilar regulatory approval pathway creates a “patent protection gap.”

Patent Protection Gap

According to BIO, a “patent protection gap” exists because a biosimilar drug is not required to be the “same” as the innovator drug. Representative Waxman’s bill requires only that the biologically similar drug have “no clinically meaningful differences between the biological product and the referenced product would be expected in terms of the safety, purity and potency if treatment were to be initiated with the biological product instead of the referenced product.” In other words, if the biosimilar drug is shown to have no “clinically meaningful difference” when compared to the innovator drug, it can theoretically gain approval even though the biosimilar drug may be different in structure, administration, or mechanism of action.

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